UGANDA – Small and medium-sized enterprises (SMEs) in Uganda’s food and beverage processing sector have been backed by US$1.5 million made available by the Official Development Assistance (ODA) framework to upgrade their production skills.
ODA is a government aid designed to promote the economic development and welfare of developing countries. The main focus of the country’s development blueprint is in agro- industrialization.
According to the Assistant Commissioner for Primary Processing and Value Addition, Ministry of Agriculture (MAAIF), Mr. Moses Kasigwa, the agro-processing agenda must become a reality, something the project funding will actively seek to promote through among other things establishing what he described as a strategic mechanism for the importation of agro-processing technology.
The production skills upgrade project aims to enhance the “technical and operational” capacity of Ugandan food processing companies, as highlighted in the National Development Plan III.
The implantation of the project started in May 2021 and is going to run until the end of this year. To make it successful, MAAIF developed Technology Advice and Solutions from the Korea project (TASK) in collaboration with the Korean Institute for Advancement of Technology (KIAT).
The collaboration aims to assist food processing companies in resolving on-site technical and operational difficulties derailing SMES value-addition efforts.
Hitherto, 11 (eleven) food processing companies have been selected after assessing their quality and price competitiveness and export potential.
The authorities also examined the SMES production and equipment capacity, staff technical ability, and the standard of their premise’s hygiene before their selection.
From the MAAIF assessment, the TASK project is already enhancing the technical capacities of Ugandan companies such as Discovery Trading Company, which are now able to directly export coffee to South Korea without going through agents and brokers as has been mostly the case previously.
“The other objective is to establish business linkages between Korean and Ugandan food processing companies to foster further cooperation after the project is completed,” reads a statement issued by MAAIF.
The TASK project seeks to not only provide technical solutions to selected SMEs in the food processing sector, but also help with the establishment of products such as instant coffee for export across Africa and the Middle East market.
There are plans to include other food companies apart from the coffee processors who are currently enjoying the fruits of the project.
Buyers from Korea can now directly interface with the SMEs in Uganda without the involvement of any third parties who are known for increasing the cost of transactions.
For example, the two Korean companies, Jaywave, and Lisilence Coffee have entered a deal with Discovery Trading Company, a local company. Jaywave has made an order for three containers (two Arabica, and one Robusta) to be shipped to Korea.
Uganda’s coffee sector sees EU traceability law implementation will lead to quagmire times
Still, on Uganda’s coffee export developments, the directive on human rights and environmental practices against big coffee buyers in Europe could impact the coffee sub-sector in Uganda and other producing countries in Africa, the Pacific, Asia, and the Caribbean.
The traceability law to be implemented soon will impose a US$500m fine on any European company that does not undertake Corporate Sustainability Due Diligence to ensure that there is no element of human rights abuse, forced labor, child labor, or degradation of the environment along the supply chain.
The Ugandan exports are afraid that European companies will shy away from doing business with the country’s farmers as the country’s system is complicated and will result in low income for farmers.
Dr. Emmanuel Iyamulemye, the Managing Director of Uganda Coffee Development Authority (UCDA) has appealed to the European Parliament to consider their context and allow the country to have one verification and monitor the supply chain for three years first.
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